Tarzan Economics reports…
When the major music companies publish their quarterly figures, analysts all too often take a blinkered view – exclusively assessing the impact of streaming and duly limiting their focus to revenue from recorded music. This is plain wrong: streaming services pay record labels, but they also pay Collective Management Organisations (CMOs) (known also as authors’ societies and/or PROs) and publishers – who in turn also pay other licensors. Digesting each ‘piece of the pie’ in isolation accentuates the problem: music needs to know how much it’s worth and calculating “the global value of music copyright” provides the answer.
In 2019, music copyright was worth $31.6bn, that’s a lot more than is reported in the IFPI Global Music Report. It’s growing fast too, up by 7%, or $2.1bn – the third consecutive year I’ve reported more than $2bn in new monies flowing back to copyright holders. [Past Editions: 2018 | 2017 | 2016 | 2015 | 2014]
Here’s how we got there. Three (partly overlapping) sources of industry analysis are brought under one umbrella: (i) IFPI’s Global Music Report, (ii) CISAC’s annual Global Collections Report, and (iii) Music & Copyright analysis of music publishing. All three posted growth in 2019, albeit at drastically different rates. In USD constant currency, record labels were up 8%, CMOs were up 4% and music publishers were up just 1%. This is a continuation of a ‘hare and tortoise’ trend: labels have gone from boom to bust and are now booming again thanks to streaming revenues, whereas CMOs and publishers who have more diverse income portfolios have never really stopped growing – albeit at more modest rates.
That’s the easy part; then it gets tricky.
Stacking It All Up
To measure the global value which has become such a helpful tool for all music industry stakeholders, we need to remove all double counting, then add back the missing parts. The chart below hops, skips and jumps over all that complexity and gets us to our final figure of $31.6bn, a jump of $2.1bn. What’s striking is how the rate of growth changes after these adjustments: labels are up 9% (as we no longer need to deduct the ‘pass through’ of CD and download mechanical revenue), CMOs – unaffected – still grew by 4%, but licence revenues that publishers collect directly (sync and grand rights) grew by an impressive 10%.
Read the full article at https://tarzaneconomics.com/undercurrents/copyright
